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Associates In Radiation Oncology, P.A. v. Siegel

Decided: March 8, 1994.

ASSOCIATES IN RADIATION ONCOLOGY, P.A., PLAINTIFF-APPELLANT,
v.
BRUCE SIEGEL, M.D., M.P.H., ACTING COMMISSIONER OF HEALTH, DEPARTMENT OF HEALTH, STATE OF NEW JERSEY, JOHN R. GLASSBURN, M.D., RADIATION THERAPY ASSOCIATES OF GLOUCESTER COUNTY, L.P., CANCER THERAPY ASSOCIATES OF NEW JERSEY, INC., AND WOODBURY MEDICAL CENTER ASSOCIATES, A GENERAL PARTNERSHIP, DEFENDANTS-RESPONDENTS.



On appeal from a Determination of the State Commissioner of Health.

Before Judges Dreier, Brochin and Kleiner.

Dreier

The opinion of the court was delivered by

DREIER, J.A.D.

Plaintiff appeals from the Acting Commissioner of Health's determination that a Certificate of Need is not required for the construction and installation of radiation equipment by Radiation Therapy Associates at the Woodbury Medical Center. Plaintiff, Associates in Radiation Oncology (Associates), operator of a competing facility at Cooper Hospital in Camden, contends that the proposed facility is governed by at least three sections of the Certificate of Need statute. We were asked to withhold our decision until February 7, 1994 while the parties explored settlement. We find that the provisions of N.J.S.A. 26:2H-7a, b, and e appear to be applicable, and that the Acting Commissioner's failure to address these sections or to provide a factual basis for the applicability of N.J.S.A. 26:2H-7c and its exception require that we remand so that these issues can be addressed.

On September 24, 1991, Associates notified the New Jersey Department of Health that an unapproved radiation oncology facility was being constructed at the Woodbury Medical Center. Although the Department of Health indicated that it would investigate, apparently it did not. On May 18, 1992, Associates brought suit against the Department of Health and the various entities involved in the construction of the new facility. Defendants moved for dismissal. After a hearing, the trial Judge refused to grant either party relief and stayed discovery until further order of the court. On November 12, 1992, the Department of Health issued its determination that a Certificate of Need was unnecessary. The trial Judge then dismissed the pending litigation. Plaintiff filed a Notice of Appeal only from the administrative order, not from the decision of the trial court.*fn1

Associates is a New Jersey Corporation engaged in the practice of radiation oncology at a licensed radiation oncology facility at Cooper Hospital/University Medical Center in Camden, New Jersey.*fn2 Defendants are Bruce Siegel, M.D., M.P.H., who was the Acting Commissioner of Health at the time the determination was issued; the New Jersey Department of Health; Dr. John R. Glassburn; Radiation Therapy Associates of Gloucester County; Cancer Therapy Associates of New Jersey, Inc.;*fn3 and Woodbury Medical Center Associates.*fn4

Dr. Glassburn, through his professional corporation, Cancer Therapy Associates of New Jersey, Inc., entered into a License and Services Agreement with Associates Limited Partnership. The agreement jointly designated Associates Limited Partnership and its limited partner, Advanced Diagnostic Imaging Associates, as "Manager."*fn5 Under the agreement, Manager is to construct or lease a medical office as well as acquire and install the equipment necessary for the oncology practice. Manager is also to be responsible for the "business aspects" of the practice, including maintaining the premises, paying utilities and taxes, procuring insurance, billing, collection, accounting, record keeping and hiring. In return for these services, Manager is to receive 70% of the total fees collected by the practice.

The facility is to be located at the Woodbury Medical Center, which is connected by a walkway to Underwood Memorial Hospital. Underwood owns the property on which Woodbury Medical Center is being constructed. Dr. Glassburn is a general partner of Woodbury Medical Center Associates which is financing the construction of the Woodbury Medical Center.

I

Associates has standing to appeal the Acting Commissioner's determination that a Certificate of Need is not required for the Woodbury facility. In In re Valley Hospital, 240 N.J. Super. 301, 573 A.2d 203 (App. Div. 1990), certif. denied, 126 N.J. 318 (1991), we held that two hospitals which had received Certificates of Need for cardiac surgery facilities and one hospital which already had a cardiac surgery facility had standing to appeal the grant of a Certificate of Need to a fourth facility. We noted that when a case involves a substantial public interest, "'but slight private interest, added to and harmonizing with the public interest' is sufficient to give standing." Id. at 304 (quoting Elizabeth Fed. Sav. and Loan Ass'n v. Howell, 24 N.J. 488, 499, 132 A.2d 779 (1957). We noted that a competitor may be the only entity with "'sufficient private interest in harmony with the public concern'" to bring errors in an administrative action to its attention. Id. at 305 (quoting Elizabeth Fed. Sav. and Loan Ass'n, supra, 24 N.J. at 501-502). Finally, we concluded that if a competitor did not have standing, no one would and "'the Commissioner's action . . . right or wrong, proper or arbitrary, [would take] on a conclusive character to the possible great detriment of the people as a whole.'" Id. at 305 (quoting Elizabeth Fed. Sav. and Loan Ass'n, supra, 24 N.J. at 501-502).

The instant case presents the same scenario. If Associates in Radiation Oncology cannot challenge the Acting Commissioner's determination, who can? Defendants attempt to distinguish In re Valley Hosp. on the basis that, in that case, the Commissioner of Health granted a Certificate of Need while in the present case, the Acting Commissioner merely determined that a Certificate of Need was not necessary. The result is, however, the same: Construction of the facility will go forward. Accordingly, plaintiff must have standing under In re Valley Hospital, supra, 240 N.J. Super. 301.

II

N.J.S.A. 26:2H-7, governing Certificates of ...


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